Financial Results for FY 2012 - NIKKISO CO., LTD.7 Industrial Division 【Pumps】 Orders and sales...

Copyright © 2013 NIKKISO CO., LTD .All rights reserved. 1

Financial Results for FY 2012 - from April 1, 2012 to March 31, 2013 -

May 7, 2013

Securities code: 6376

[Notice] This material contains forward-looking statements about future business performance. These statements by definition involve risks and uncertainties and are not intended to guarantee future performance. Actual results in the future may differ from the estimates presented in the material herein due to changes in the business environment and other factors.


Financial results for FY 2012


Both orders and net sales increased year on year.

Earnings also increased due to the sales-increase effects along with rapid yen depreciation and gain on sales of former head office site, adding to the sales-increase effects.

Status by segment

Industrial Business - Performance of LEWA products was favorable for the oil and gas industries. - Earnings were affected mainly by additional costs of the development of LNG pumps and making an affiliate that develops ultraviolet LEDs into a consolidated subsidiary. Medical Business - The new dialysis monitoring machine continued to sell strongly and contributed to operating performance. - In consumable items, blood tubing lines remained favorable, while dialyzer grew at a sluggish pace.

Overview of financial results

Copyright © 2013 NIKKISO CO., LTD .All rights reserved.

FY 2011 FY 2012 YoY comparison

Amount %

Orders 94,921 103,409 +8,487 +8.9%

Net Sales 90,137 103,670 +13,532 +15.0%

Operating Income 6,580 7,481 +901 +13.7% Ratio to net sales 7.3 ％ 7.2 ％

Ordinary Income 6,370 8,945 +2,575 +40.4% Ratio to net sales 7.1 ％ 8.6 ％

Net Income 3,317 6,897 +3,580 +107.9% Ratio to net sales 3.7 ％ 6.7 ％

Exchange Rate (average during the period)

Against the US dollar 78.00 yen 81.34 yen +3.34 yen － Against the euro 107.75 yen 104.91 yen -2.84 yen －

4


(Unit: millions of yen)


Non-Operating Income (Expenses) and Extraordinary Gains (Losses) (Unit: millions of yen)


Changes Remarks

Non-operating income (expenses) , net (210) 1,463 +1,674

Interest received (paid) , net (834) (702) +132 Foreign exchange gains (losses), net (166) 1,499 +1,666 Rapid depreciation of yen

Extraordinary gains (losses) (479) 2,414 +2,893

Gain on sales of noncurrent assets 22 2,657 +2,634 Sales of head office site Loss on valuation of investment securities （335） (51) +284 Recover the holding share value

－ (176) -176 Relocation expenses of production function from Shizuoka to Kanazawa

[Reference: Exchange rate trends] US dollar Euro

FY 2011 FY 2012 YoY change FY 2011 FY 2012 YoY change

Conversion rate

Previous year end 83.15 82.19 117.57 109.80

Fiscal year end 82.19 94.05 109.80 120.73 Change from

previous year end -0.96 +11.86 +12.82 -7.77 +10.93 +18.70

(Unit: yen)





Amount %

Industrial Business

Orders 52,393 54,663 +2,269 +4.3%

Net Sales 47,490 55,176 +7,685 +16.2%

Operating Income 4,662 3,770 -892 -19.1%

Medical Business

Orders 42,528 48,746 +6,218 +14.6%

Net Sales 42,646 48,493 +5,846 +13.7%

Operating Income 5,224 6,962 +1,737 +33.3%

Eliminations and corporate Operating Income （3,306）（3,250） +55 －

6

Business Segment Performance



Amount %

Orders 41,733 42,655 +921 +2.2% Pumps 37,195 38,873 +1,678 +4.5% Water Quality Control Systems 4,538 3,781 -757 -16.7%

Net Sales 36,281 42,985 +6,703 +18.5% Pumps 31,090 38,828 +7,738 +24.9% Water Quality Control Systems 5,191 4,156 -1,034 -19.9%

7

Industrial Division 【Pumps】 Orders and sales of LEWA products remained strong mainly for the oil and gas industries. “Shell Gas Revolution” started having impact on the order environment for LNG pumps, - new orders will be expected in North America - new projects in the conventional gas development began to be in a wait-and-see mood

【Water Quality Control Systems】 Earnings fell, due mainly to the shutdown of nuclear power plants and the postponement

of periodical inspections at thermal power plants. (Unit: millions of yen)


(100)

(50)

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Orders (Left axis) Net Sales (Left axis) EBITDA (Left axis) Order Backlog (Right axis)

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

2010 2011 2012

Performance Trends of LEWA (Euro based) (Unit: millions of euros) Industrial Division



Amount %

Orders 5,636 6,067 +431 +7.6%

Net Sales 6,217 6,195 -21 -0.3%

9

Precision Equipment Business Division 【Particle analytical equipment】 As the domestic economy showed signs of bottoming out during the latter half of the year,

order environment began to improve in some sectors. Generally, sales stagnated under the influence of careful attitude to R&D investments.

【Electronic component manufacturing systems】 The electronic components market continued to be in a severe condition. Orders and sales remained stagnant.

【Ultraviolet LEDs】 UV Craftory Co., Ltd., a developer of ultraviolet LEDs, was turned into a consolidated

subsidiary and began taking steps toward business development.




Amount %

Orders 5,023 5,940 +916 +18.2%

Net Sales 4,991 5,995 +1,003 +20.1%

10


Aerospace Division 【Overview】 Aircraft demand for energy-efficient new planes and for Low Cost Carriers continued to

be on the rise and aircraft manufacturers continued to increase the production. Orders and sales of aircraft thrust reversers (such as ‘cascades’ and ‘blocker doors’),

which are the core products of the division, were favorable.

【Overseas production】 The construction for facility expansion at the Hanoi Plant in Vietnam was completed

and the production of ‘torque box’ started.



Amount %

Orders 42,528 48,746 +6,218 +14.6%

Net Sales 42,646 48,493 +5,846 +13.7%

11


Medical Division 【Dialysis Machines】 In Japan, sales of dialysis machines remained favorable thanks to the ‘Total System’

products which include dialysis machines and central monitoring system, as well as brisk sales of the new dialysis monitoring machine which was fully launched in January 2012.

Sales in China increased with adding on sales of knock-down parts to the joint venture, which started production and sales from last September, while sales in Europe and South America stagnated.

【Disposables】 Sales of dialyzers remained nearly flat. Sales of blood tubing lines continued to grow steadily thanks to the strong demand for

special tubing lines to the new dialysis machine.


Financial forecast for FY 2013


13

In FY 2013, orders and net sales are expected to increase year on year. In earnings, operating income will increase year on year, while ordinary income and net income are expected to decrease due to the influence of foreign exchange gains and gain on sales of former head office site recorded in FY 2012. Forecast by segment Industrial business - Thanks to expansion of energy demand, LEWA products will continue to be favorable and orders and net sales of industrial business are expected to be increase year on year. Medical business - Business condition will continue strong due to expansion of sales of dialysis equipment especially new dialysis monitoring machine. Regarding the relocation of manufacturing function in Shizuoka plant to Kanazawa, new plant construction began and we work for starting operation from April 2014.



14

FY 2012 FY 2013 (Forecast) YoY comparison

Amount %

Orders 103,409 117,000 +13,590 +13.1%

Net Sales 103,670 114,000 +10,329 +10.0%

Operating Income 7,481 8,500 +1,018 +13.6% Ratio to net sales 7.2 ％ 7.5 ％

Ordinary Income 8,945 8,500 -445 -5.0% Ratio to net sales 8.6 ％ 7.5 ％

Net Income 6,897 5,400 -1,497 -21.7% Ratio to net sales 6.7 ％ 4.7 ％

Exchange Rate (average during the period)

Against the US dollar 81.34 円 95.00 円 +13.66 円－ Against the euro 104.91 円 125.00 円 -20.09 円－






Amount %

Industrial Business

Orders 54,663 66,000 +11,336 +20.7%

Net Sales 55,176 63,000 +7,823 +14.2%

Operating Income 3,770 5,000 +1,229 +32.6%

Medical Business

Orders 48,746 51,000 +2,253 +4.6%

Net Sales 48,493 51,000 +2,506 +5.2%

Operating Income 6,962 7,000 +37 +0.5%

Eliminations and corporate Operating Income (3,250) (3,500) -249 －

15

Financial Forecast by Business Segment


Forecast for Industrial Division


Amount %

Orders 42,655 52,500 +9,844 +23.1% Pumps 38,873 48,100 +9,226 +23.7% Water Quality Control Systems 3,781 4,400 +618 +16.4%

Net Sales 42,985 49,500 +6,514 +15.2% Pumps 38,829 45,300 +6,471 +16.7% Water Quality Control Systems 4,156 4,200 +43 +1.0%

【Pumps】 World energy demand will continue to grow in the future. Sales is expected to increase by developing products which satisfy customers needs and pursuing offering solutions together with LEWA. 【Water Conditioning System】 Strengthening sales activities toward newly constructing thermal power plants and system products for various uses besides power plants.

16




Amount %

Orders 6,067 6,000 -67 -1.1%

Net Sales 6,195 6,000 -195 -3.2%

【Particle analytical equipment】 In Japan, real economy is estimated to recover thanks to the effect of

fiscal and monetary policies. Sales is expected to increase through strengthening product lineup by

releasing new products. 【Electronic component manufacturing systems】 Global demand of electronic component seems to bottom out. Order of electronic component manufacturing system is expected to

recover. 【Ultraviolet(UV) LEDs】 Preparing for commercial production of UV-LEDs since capability of LED chip got to the practical level and the market growth is expected.

17


*change the classification of a subsidiary to Industrial Division from FY 2013 (sales in FY2012 was 1,531million yen)

Forecast for Precision Equipment Business Division



Amount %

Orders 5,940 7,500 +1,559 +26.2%

Net Sales 5,995 7,500 +1,504 +25.1%

【Outlook】 Demand for airplane will continue to increase strongly. Sales is expected to increase thanks to adjustment of super-strong yen situation 【Relocation of production site】 Implement transfer and enhancement of production at the Hanoi plant in Vietnam which has completed the construction for facility expansion. Work for transferring manufacturing function in Shizuoka plant to Kanazawa.

18


Forecast for Aerospace Division



Amount %

Orders 48,746 51,000 +2,253 +4.6%

Net Sales 48,493 51,000 +2,506 +5.2%

【Domestic Market】 Hard to estimate a significant growth in hemodialysis market under the society of depopulation caused mainly by declining birth rate. Expect the increase of labor-saving needs of medical facilities and advancement of dialysis treatment methods Promoting sales of ‘Total System’ products mainly new dialysis

monitoring machine and disposables. 【Overseas Market】 Focus on strengthening sales of dialysis machines in Chinese market. Promoting in Chinese business by utilizing the know-how which we

cultivated in Japanese market and enhancing cooperation with our business partner, ‘Weigao group’.

19


Forecast for Medical Division


5 year Business Plan “NIKKISO VISION 2018”

- From April 1, 2013 to March 31, 2018 -


Three Pillars for the next 5years

- To re-establish “Nikkiso Technologies” and “Best Practice Models” to exceed customer expectations - To realize returns on investments during the past years, and leverage them to our future growth - To broaden and deepen our business domain by developing new businesses

NIKKISO VISION 2018 Mobilizing full resources and capabilities of Nikkiso group for Addressing customers critical challenges Providing the best solutions with our unique technologies Create value as the Partner of choice

5 Year Business Plan


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08/3 09/3 10/3 11/3 12/3 13/3 14/3 列1 列2 18/3

Net Sales(left axis) OP(right axis)

【 Numerical Goal 】

Net Sales: 150 billion Yen OP Margin: 9％ ( OP: 13.5 billion Yen )

NIKKISO VISION 2018

（Unit: Billions of Yen）

Our Goal To be a highly profitable company with unique technologies as source

of sustainable competitive advantage We set following figures which is achievable as a result of our efforts.

5 Year Business Plan


(Reference Materials)


End of FY 2011

End of FY 2012 Changes

% to Total End of

FY 2011

% to Total End of

FY 2012

[Total Assets] 118,234 138,345 +20,110 100.0% 100.0%

Current assets 62,971 82,288 +19,315 53.3% 59.5%

Cash and deposits 13,817 26,650 +12,832 11.7% 19.3% Notes and accounts receivable-trade 30,434 33,429 +2,994 25.7% 24.2%

Inventory 16,281 19,371 +3,089 13.8% 14.0%

Fixed assets 55,262 56,057 +794 46.7% 40.5%

[Total Liabilities] 67,841 79,786 +11,945 57.4% 57.7% Notes and accounts payable-trade 12,621 14,620 +1,998 10.7% 10.6%

Debt with interest 44,332 49,845 +5,512 37.5% 36.0%

[Total Equity] 50,392 58,558 +8,165 42.6% 42.3%

24

Consolidated Balance Sheets



FY 2011 FY 2012 Changes

Cash flows from operating activities 3,961 8,398 +4,437

Depreciation and amortization 2,738 2,841 +102

Cash flows from investing activities (3,325) (324) +3,000

Purchase of property, plant and equipment (2,586) (3,693) -1,107

Proceeds from sales of property, plant and equipment 51 4,021 +3,970

Free cash flows 636 8,074 +7,438

Cash flows from financing activities (10,242) 3,653 +13,895

Increase (decrease) debt with interest (Note) (7,712) 4,752 +12,464 Repurchase of treasury stock (1,436) (15) +1,421

Cash and cash equivalents at the end of year 13,108 25,555 +12,447

25

Consolidated Statements of Cash Flows


(Note) Breakdown of debt with interest: short-term loans, long-term debt, and corporate bonds


41%

6% 6%

47%

Japan

52%

Asia

19%

North

America

10%

Europe

17%

Others

2%

26

By Segment By Region Industrial Business

53.2% Medical Business

46.8% Total net sales overseas

48.3%

Net Sales Composition Ratio: Corporate (Consolidated)

Industrial Division

Precision Equipment Business Divisioin Aerospace DIvision

Medical Division


Orders Trends by Quarter


1st quarter 2nd quarter 3rd quarter 4th quarter

Industrial Division FY 2011 10,159

（7,400） 10,205 （7,560）

13,137 （10,261）

8,230 （6,075）

FY 2012 10,469 （8,200）

10,849 （8,471）

9,847 （7,585）

11,489 （9,637）

Precision Equipment Business Division

FY 2011 1,288 （381）

1,485 （411）

1,503 （362）

1,358 （493）

FY 2012 1,439 （412）

1,775 （390）

1,439 （326）

1,413 （426）

Aerospace Division FY 2011 879

（857） 1,232 （1,210）

904 （892）

2,007 （1,962）

FY 2012 1,213 （1,192）

1,457 （1,453）

1,411 （1,391）

1,858 （1,855）

Medical Division FY 2011 9,827

（2,024） 10,814 （2,499）

11,786 （2,985）

10,099 （654）

FY 2012 11,677 （1,956）

11,233 （2,113）

13,080 （2,412）

12,755 （2,815）

( ) overseas orders


Net Sales Trends by Quarter




（4,533） 11,359 （7,720）

7,567 （5,322）

10,771 （7,284）

FY 2012 8,006 （5,502）

10,232 （7,178）

7,948 （6,358）

16,797 （14,100）


FY 2011 1,173 （384）

1,558 （503）

1,295 （296）

2,190 （588）

FY 2012 1,015 （337）

1,608 （472）

1,358 （444）

2,212 （456）


（857） 1,231 （1,210）

893 （878）

1,984 （1,966）

FY 2012 1,215 （1,189）

1,475 （1,459）

1,415 （1,394）

1,889 （1,860）


（1,851） 11,166 （2,416）

9,755 （1,638）

12,663 （2,215）

FY 2012 10,630 （2,075）

12,087 （2,075）

12,138 （2,181）

13,637 （2,987）

( ) overseas sales


Order Backlog Trends by Quarter




（17,804） 23,329 （17,644）

28,298 （22,583）

25,757 （21,373）

FY 2012 28,220 （17,636）

28,837 （25,364）

30,736 （26,591）

25,427 （22,128）


FY 2011 869 （378）

796 （286）

1,606 （352）

774 （256）

FY 2012 1,198 （456）

1,365 （250）

1,445 （132）

646 （103）


（0） 20 （0）

32 （14）

55 （10）

FY 2012 53 （3）

34 （7）

30 （5）

0 （0）


（2,075） 2,245 （2,157）

4,276 （3,505）

1,711 （1,637）

FY 2012 2,757 （1,476）

1,904 （1,556）

2,846 （1,788）

1,964 （1,615）

( ) overseas order backlog

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Financial Results for FY 2012 - NIKKISO CO., LTD.7 Industrial Division 【Pumps】 Orders and sales...

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